[lbo-talk] 'PayDay Loan' Practices Condemned

[Steven L. Robinson]

ACORN demands Money Mart end predatory practices

Group gives company 'Loan Shark of the Year'  award


ACORN demonstrated against Money Mart, which is financed by Wells Fargo. On
Thursday, March 2, members of ACORN and ripped off Money Mart customers
protested at Money Mart stores in more than 30 cities throughout the U.S.
and Canada, including the Money Mart store at Market and Seventh streets in
San Francisco.

The group presented Money Mart with a "Loan Shark of the Year" award for
"gouging customers through predatory payday lending, criminal check-cashing
fees and rip-off refund loans."

"This company's entire business is based on gouging people in need," said
ACORN member Paulette Chappill-Otten, "and we aren't going to take it any
more."

A resident of the Fillmore, Ms. Chappill-Otten got a payday loan from Money
Mart for $500 and wound up paying them back more than $800. The interest
rates on Money Mart's payday loans range from 266 percent to 912 percent.

While Money Mart says payday loans help people in a one-time emergency,
ACORN charges that payday loans get people deeper in debt and that Money
Mart's profits come from customers who can't pay the loans back and so are
forced to repeatedly renew the loans and pay additional interest.

A $300 payday loan from Money Mart costs $352.50. If after two weeks the
customer can't pay the full amount, they pay the $52.50 finance charge and
Money Mart rolls the loan over for two more weeks.

If, as in many cases, this continues for three months, the customer will
have paid Money Mart $341 in interest and still owe the entire $352.50 loan
amount. Money Mart is the second largest payday lender in the country,
behind Advance America, and the second largest check casher, behind ACE Cash
Express. Money Mart is financed by Wells Fargo.

ACORN is also demanding that Wells Fargo get out of this business and stop
financing Money Mart's unfair lending practices.

For more information about ACORN (www.acorn.org), call (415) 587-9080 or
(510) 834-4111 or email them at caacorn at acorn.org.

http://www.sfbayview.com/030806/acorndemands030806.shtml

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